Generally, in response to the FAR, DFARS and CFR policies related to the Service Contract Act, contractors are required to submit price adjustment proposals, for calculations, analyses and determinations by Government Contract Specialists. Currently, the calculations, analyses and determinations are performed manually and/or performed with the limited aid of noncomprehensive spreadsheets (either automated spreadsheets or hardcopy paper spreadsheets or the calculations and analyses are sometimes not performed at all) by the Government Contract Specialists in view of the rules, regulations and policies governed by the FAR, DFARS and CFR, as they pertain to arriving at a correct subset of hours entitled to price adjustment, and/or arriving at the correct amount of a price adjustment and/or arriving at a correct allocation of a price adjustment to line items of any given federal service and/or construction contract.
The chapter for SCA in the FAR does not require contractors to submit wage adjustment proposals using a specific and/or prescribed format. Consequently and/or routinely, raw data provided by contractors are voluminous and complex. For any given contract proposal, contractor data may be structured as hundreds of contract line items, where each line item may have multiple parts. In addition, each line item may have multiple customers and each customer may fund different purchases using different colors of money. Each line item may utilize multiple (sometimes 10-20) labor categories, which can be an overwhelming compliance task for the Government Contract Specialist. Further, the labor categories at issue can be governed by multiple wage determinations, even within the same line item, there may be three or more wage determinations governing labor rates. In addition, the Government Contract Specialist must perform high level analyses involving summarizing and subtotaling the contractor's raw data on several different factors to draw out data integrity, validity, consistency, and allowability of a given proposal. The opposite occurrence, which is equally as pervasive, is that contractors sometimes submit summarized data which cannot be analyzed on more than one level or the summarized data cannot be easily checked for validity by the Government Contract Specialist. Additionally, there is no uniformly accepted format or process for a Government Contract Specialist to utilize in performing analyses on a contractor's wage adjustment proposal.
A complex contractor proposal for any given military base operating service contract (i.e., BOSC) can take three or more Government Contract Specialists working full time over three months to calculate price adjustments for such a complex contract. There may be multiple contractor submissions and resubmissions for the Government Contract Specialists to keep track of. Each contractor submission and/or resubmission proposal may include contents amounting to multiple spreadsheets and each spreadsheet may contain ten to fifteen worksheets containing over twenty columns of information, per worksheet. To add to the inconsistency and confusion, random complex embedded formulas may be embedded in calculated cells of any given spreadsheet and copied over thousands of rows of data. Furthermore, other individuals and advisors may be required to evaluate allowability and allocability of requests and perform formula analysis and compliance analysis.
The instant application incorporates by reference the FAR Clauses at 52.222-43/44, which contain material related to the development of an algorithmic expression and/or a plurality of algorithmic expressions and formulas used in the methods and systems of the SCA PACT tool; although related, this material does not comprise the essential ingredient(s) relied upon in the creative process of developing the SCA PACT tool. The FAR Clauses at 52.222-43/44, relating to the Fair Labor Standards Act and Service Contract Act-Price Adjustment, although similar to “equitable adjustments”, are also significantly different in that they have their own criteria as to what is permissible for price adjustment and what is not. The FAR clauses specifically exclude profit, overhead and general and administrative expenses. The clauses also limit the adjustment to “actual increases” in costs that are caused explicitly by the contractor being “made to comply” with a SERVICE CONTRACT ACT contract (i.e., an SCA) wage determination that requires a higher wage and/or fringe benefit rate. The SERVICE CONTRACT ACT applies only to service employees, where the phrase service employees means any person engaged in the performance of a service contract or subcontract, other than persons employed in bona fide executive, administrative, or professional capacities. The instant application incorporates by reference the SERVICE CONTRACT ACT OF 1965, codified in FAR Clauses at FAR Subpart 22.10; DFARS Subpart 222.10, FAR 22.1003, and FAR 22.1003, which contain material related to the development of algorithmic expressions and formulas used in the methods and systems of the SCA PACT tool (see, MCNAMARA-O'HARA SERVICE CONTRACT ACT OF 1965 (SCA, see 41 U.S.C. §§351-358; 29 C.F.R. Part 4; FAR Subpart 22.10; DFARS Subpart 222.10; FAR 22.1002; and FAR 22.1003); although related, this material does not comprise the essential ingredient(s) relied upon in the creative process of developing the SCA PACT tool. Contractors performing any service contracts shall pay their employees not less than the Fair labor Standards Act minimum wage. The instant application incorporates by reference the FAIR LABOR STANDARDS ACT OF 1938 (FLSA), codified in FAR Clauses at FAR Subpart 22.10, which contain material related to the development of algorithmic expressions and formulas used in the methods and systems of the SCA PACT tool (see, the FAIR LABOR STANDARDS ACT OF 1938 (FLSA) 29 U.S.C. §§201-219; and FAR Subpart 22.10); although related, this material does not comprise the essential ingredient(s) relied upon in the creative process of developing the SCA PACT tool. Also, see the DAVIS BACON ACT; which applies to federal contracts involving construction of public buildings or public works. The instant application incorporates by reference the DAVIS BACON Act, codified in FAR and DFARS Clauses at FAR Subpart 22.4 and DFARS Subpart 222.4, which contain material related to the development of algorithmic expressions and formulas used in the methods and systems of the SCA PACT tool (see, DAVIS BACON ACT, 40 U.S.C. §§3141-3144; 29 C.F.R. Part 5; FAR Subpart 22.4 and DFARS Subpart 222.4); although related, this material does not comprise the essential ingredient(s) relied upon in the creative process of developing the SCA PACT tool.
The instant application also incorporates by reference a Department of the Navy document titled DESK GUIDE FOR SERVICE CONTRACT PRICE ADJUSTMENTS SERVICE CONTRACT ACT AND FAIR LABOR STANDARDS ACT, JANUARY 2007, which contains material related to the development of algorithmic expressions and formulas used in the methods and systems of the SCA PACT tool; although related, this material does not comprise the essential ingredient(s) relied upon in the creative process of developing the SCA PACT tool.
Historically, contract price adjustments have created substantial challenges for the Government acquisition community for two reasons. First, contractors often include items in their price adjustment proposals that the applicable FAR, DFARS and CFR clauses do not permit and therefore if “rubber stamped” by the individual Government Contract Specialist evaluating the price adjustment proposal, these impermissible items lead to Government wide inconsistencies in price adjustment calculations and determinations, which in turn lead to any given Government agency paying adjustments that are greater than the contractors correct entitlement under the clause(s). Second, the contractor's proposals are often very detailed and complex. Therefore, when given the scrutiny necessary to arrive at a correct contract price adjustment, the process can be extremely time consuming for the Government Contract Specialist to review and analyze. Currently, there is little if any time dedicated to such close scrutiny and checks because of the inordinate amount of time it takes to calculate numerous contract price adjustments.
Federal agencies spend over thirty-four (34) billion dollars in service contracts, where at least, sixty percent of the service contracts are adjusted using the aforementioned price adjustment clauses. Thus, wage rates may go up concomitantly approximately two to four percent per year. Therefore, it is conservatively estimated that the SCA PACTp tool saves three percent on every service contract that is adjusted. Thus, hundreds of millions of dollars can be saved per year by implementing the SCA PACTp tool, based on two factors (1) enforcing legal requirements in regard to paying contractors for price adjustments and (2) providing savings in person hours worked for users, operators and contract specialists in regard to calculations and analyses. On average, at fifty hours of price adjustments per 100,000 contract actions multiplied by the average journeyman pay rate of a contract specialist, the Government could realize savings in dollars spent on adjustments, and realize savings in dollars and hours for finance people and contracts people and could realize productivity savings. There is a third level of savings that contractors can realize, based on having a standard format required for submission of contract price adjustment proposal data. Contractors do not have to go through numerous iterations of determining just what data the user, operator and/or contract specialist wants and how and in what format the user, operator and/or contract specialist wants that data. An additional incentive is recognized by a plurality of contract workers who receive appropriate pay and benefits, when price adjustments are correctly determined and administered.
SCA and DBA contract price adjustments have never been organized and determined in an automated manner before, and in such a manner that clearly informs the purchasing end user and/or customer using the contract, just what and how much a given increase is for, i.e., where the working efforts are allocated. Thus, the importance of the SCA PACT tool is that the format that the raw data is received in is allocable. Allocability of contract pricing is a FAR requirement that had been virtually unattainable in contract price adjustments for large contracts, until the development of the SCA PACT tool.
Therefore, the need exists for a computer automated method and system, using software program applications, to standardize and make more efficient the processes for adjustment of contract prices due to the impact of the SCA.
Further, the need exists for an automation tool that provides intuitive, user friendly interfaces which can be globally updateable, in regard to keeping pace with changes in applicable FAR, DFARS and CFR clauses.
The need exists for an automation tool providing an automated method and instructions which will save person hours per contract in wage adjustment analyst time by decreasing the time and focus of Government Contract Specialists required for performing tedious and time consuming contract price adjustment tasks, requiring overtime, associated with determining, interpreting and implementing complex procedures or trade-offs in making wage and health and welfare calculations of labor and cost adjustments under the Service Contract Act rules.
The need exists for an automation tool that will reduce the requirement for multiple Government Contract Specialists and multiple compliance analysts to be involved with any given complex contract price adjustment determination.
The need exists for an automated method that will provide means for saving costs by eliminating unallowable adjustments.
The need exists for an automation tool that will shift the person hour focus of Government Contract Specialists from analysis of line items and compliance with the SERVICE CONTRACT ACT and DAVIS BACON ACT regulations to the important focus of determining accuracy and validity of any request for contract price adjustment, while maintaining focus on allowability and proper allocability for contract price adjustments.
The need exists for an automation tool that will simplify SERVICE CONTRACT ACT and DAVIS BACON ACT wage adjustments, while providing accuracy and consistency in Federal contract price adjustment determinations.